(Washington) US Trade Representative Katherine Tai announced on Wednesday the launch of a lawsuit against Canada under their trade deal, over a lingering dispute over dairy products.
Posted at 3:19 p.m.
The United States has officially requested “consultations” under the United States-Mexico-Canada Agreement (USMCA) dispute settlement, saying that “the restrictions imposed by Canada” on American products are “contrary” to its commitment made under this treaty.
“We have made it clear to Canada that its new policies do not comply with the provisions of the AEUMCA and prevent American workers, producers, farmers and exporters from taking full advantage of the market access to which Canada has committed in virtue” of this treaty, justified Mme Tai, in a statement.
The two countries have been clashing for months over the granting of tariff quotas, provided for in their free trade agreement, a mechanism imposing a zero or low customs duty on imports of certain products up to a determined quantity.
Washington denounces that a majority of tariff quotas are granted to Canadian processors, who are more inclined to import commercial quantities of cheap cheese.
The Biden administration had previously appealed to the USMCA settlement panel, which replaced the 1er July 2020 the North American Free Trade Agreement (NAFTA) of 1994.
This group concluded in early January that Canada’s practice of maintaining reserves of tariff quotas for the exclusive use of dairy processors was inconsistent with the USMCA.
Last week, Canada announced a new policy, believing it had come into compliance, a vision not shared by the Biden administration.
In principle, in the event of a lack of consensus, Washington could eventually impose customs duties.
So far, the Biden administration and the Canadian government have shown their willingness to settle this dispute through consultations.
“Canada’s protectionist dairy policies are a major concern for the US Department of Agriculture,” Agriculture Secretary Tom Vilsack said in the statement.
He stressed that “real and meaningful access to the Canadian market” was a “top priority” and that the government was considering “all available options to achieve this objective”.